Dave Ramsey Financial Bible Study – Is It Best To E-File My Taxes?

Is e-filing really a much better way to file your taxes? 

Americans and the IRS may not agree on everything, but they’re largely on the exact same page in regards to e-filing individual income tax returns.

Nearly all individual income tax returns submitted to the IRS are e-filed.  E-filing is a favorite as it’s a win-win for taxpayers and the IRS.

If you e-file your federal income tax return, you save the IRS cash because its workers don’t need to spend time manually processing your return. In return, you can get any refund you’re owed quicker, particularly in the event that you have it directly deposited to your bank accounts.

However, what about security?  And can electronic filing actually provide you access to all of the forms that you may need in case you have a intricate tax situation?  Are there situations when you can’t e-file?  Let’s look at the benefits of e-filing, and if it might be the best filing choice for your requirements.

If you are Considering e-filing, a Few of the advantages include:

  1. Quick affirmation your forms have been received: The IRS will affirm a tax filing was received within one day of electronic submission.  For paper filers, the IRS does not send any acknowledgment your forms have arrived . 
  2. Timely refunds: When you publish a paper filing, it may take six to eight months to receive a tax refund.  With e-filing, you’ll get your money in three weeks or not.  Choosing direct deposit may also accelerate the refund process.

  3. Reduced likelihood of errors: In accordance with the IRS, there is approximately a 1 percent error rate on e-filed returns, compared with a 20% speed of mistakes on paper filings.  The IRS also provides more info on issues discovered on e-filed yields compared with paper yields.

  4. Easy payment process: If you owe the IRS money, it is simpler to cover at your convenience if you e-file.  It’s possible to submit returns early and pay later if necessary, provided that you pay by the April 15 filing deadline.  And you’re able to schedule electronic money transfers to send the IRS what you owe on a date of your choosing — again, as long as the IRS receives your payment by Tax Day. Additionally you have the option to pay your balance by making use of the IRS Immediate pay service from the checking account or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order.  Just be aware delaying payment after the filing due date (typically April 15) will lead to interest and penalties.

  5. Digital storage of tax information: Submitting returns electronically means there is a digital copy of your tax documents.  If something happens to your paperwork, then you’ll have an electronic backup.

The good news: Most taxpayers do decide to e-file and find those advantages — and the practice of doing so is easy.

You have four choices for submitting an electronically filed tax return to the IRS.

The types do the math for you and provide basic advice.  You can only do your federal return with all these kinds. 

  • Utilize an online tax preparation tax or service applications: Tax preparation software and online filing services are alternatives.  These choices are an easy way to finish and e-file your forms.  Some software providers charge for their apps, Some are liberated.   The software asks you simple questions about your own life and finances to steer you through the completion of your types.  
  • Get complimentary, in-person tax help: In most states, you will find volunteers to help prepare and e-file yields.  But eligibility for free help is normally restricted based on earnings, and a few services cater to specific demographic groups.  For example, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older.  The IRS maintains a record of licensed providers, but you should be aware this option is likely to be the most costly one. 

    Using online tax preparation software is far and away the favored approach of most taxpayers.  Actually, the IRS says it expected over four in five tax returns to be filed through tax return prep software.

    Is e-filing really secure?

    While e-filing is convenient, you may worry about security — particularly with all these data breaches.  But experts agree this is not an issue that should dissuade you from e-filing.

    “E-filing a tax return has turned out to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product leadership, marketing and revenue at LegalShield. “In fact, it may be more secure than paper filing as you’re sending your personal information through an encrypted system as opposed to exposing your data in the email.”

    Dennis Chow, vice president of information security at SCIS Security, explains that the IRS has put safety measures in place to keep your information safe.  “Trainers normally use IRS specific APIs that need ab sessions,” Chow says.  “All of this can be routed over TLS encrypted links .”

    It is very important to use a trusted service that will assist you file your taxes.  Chow advises not to e-file on a public computer or use an internet connection which is not confidential.

    Bottom line

    For most taxpayers, it makes sense to e-file a return because it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment options.  Just make sure that you use tax planning software from a trusted source, so you can ensure the information you provide to transmit to the IRS is going to be kept secure.